Why virtual stores are an entry for brands into the metaverse

Online shopping today is evolving beyond the basics of browsing a website and the ease of one-step checkout. In the pandemic era, e-commerce is becoming increasingly virtual. As brands look to find more meaningful ways to connect with at-home shoppers, and consumers seek out a more personalized experience when shopping online, brands like Ralph Lauren, General Mills, Charlotte Tilbury, American Girl, and Mondelez’s Lacta, are expanding their store footprint – digitally. While some brands were testing out virtual shopping experiences before the pandemic—Tommy Hilgifer created a virtual pool party in 2019 to showcase its summer collection—virtual stores became a way to safely recreate the brick-and-mortar shopping experience amid Covid lockdowns. And during the 2021 holiday seasons virtual stores became the first step into the metaverse for many brands. Virtual stores represent the future of how marketing and e-commerce will interact, and provide a more entertaining and interactive way for brands to showcase products in the digital world. All of this is helping brands figure out the metaverse, a collection of interoperable virtual worlds that are seen as the next phase of the internet. Virtual stores can be an easy entry point for consumers who are not familiar with the metaverse, but are familiar with a brand. They are also a way to connect with younger consumers who are used to virtual technology. This comes as tech giants like Facebook bet their future on the metaverse, and platforms like Snap emphasize augmented and virtual reality capabilities to help brands get virtual stores up and running. Traditional e-commerce sites are typically 2D interfaces with grids of product photos that shoppers have to sort through. Virtual stores, on the other hand, are immersive, three-dimensional experiences that can be navigated. They are not necessarily exact replicas of traditional stores, but can combine the physical store experience with the ease of e-commerce. “The virtual store environment can be a photo-realistic version of a physical store or a more creative and fantastical environment that’s rendered graphically,” said Neha Singh, founder and CEO of Obsess, which helped create virtual stores for brands like American Girl and Charlotte Tilbury. “Shoppers can explore the virtual environment in the same way they would explore an environment in an online video game, navigating through sections of the store and clicking on products and collections to engage with them.” For brands looking to better reach and understand their consumers in the wake of the demise of the third-party cookie, virtual stores can generate a plethora of data. Obsess, for example, provides detailed, anonymized, first-party data on every consumer interaction that occurs within a brands’ own virtual store, according to Singh. For instance, a brand can see how many people are visiting each section of the virtual store, how much time they are spending in each section, which products they are selecting and the items they are adding to their cart, among other things. While brands of course are looking for virtual stores to help drive sales, they are also a lesson in experiential marketing for the Zoom age. “These are opportunities for marketing and sales teams to work together, where their KPIs align,” said Donna Sharp, managing director at MediaLink. “For brands doing these immersive spaces, there is a lean towards sales, but it’s also experiential marketing.” The team at American Girl was inspired to launch its own virtual store after seeing Ralph Lauren’s last year. “We liked how customers were able to have an immersive retail experience from the comfort of their own homes,” said Stacy Carpenter, manager of user experience at American Girl. “Given our expertise in experiential retail, we knew we could create a premium virtual experience for customers, as well.” She added that the brand wanted to help customers get a feel for American Girls stores online before making an in-person visit. The American Girl virtual store went live in June. Similar to its traditional e-commerce site, there is a version of the store for children and one for adults. The kids’ side has a virtual museum housed in a large pink and white mansion. Each room features a different American Girl doll, with facts and quizzes about her life. At the end of the museum, kids can add items to a digital wishlist. The adult site lets users walk through a virtual version of the retailer’s vast Chicago store. Rather than browsing a website, virtual store visitors can explore products based on the layout. For example, they can shop dolls, accessories and clothing based on a specific American Girl, activity, or theme. “Customers don’t understand that there are separate e-commerce and retail teams,” said Carpenter. “They expect a seamless experience, and I think that’s where virtual stores come in.” Retail teams can work with sales teams to best display products in a virtual setting in a different way than they would in physical stores. The virtual store has made testing new shopping concepts faster, according to Carpenter, and it allows the brand to quickly swap out themes to keep up with the seasons or cultural moments. For Charlotte Tilbury, it allowed the makeup brand to re-think the entire traditional store layout. In November, Charlotte Tilbury worked with Obsess to create a virtual holiday store, a loosely space-themed site with floating tables of products. The experience has a “shop with friends” feature that lets customers invite friends and family to shop alongside them. There’s no sign-up needed, and groups are able to shop individually or separately. They can also book a virtual makeup consultation. For brands considering a virtual store, Obsess’ Singh recommends that they think outside of the traditional retail box. “It doesn’t have to look like a traditional store,” she said. “Ask how you want to express your brand.” General Mills took this approach with its “Tailgate Nation” experience in October. The site allowed customers to choose between a virtual tailgate or “homegate.” The tailgate site takes place in a virtual Michigan stadium parking lot with tents for General Mills brands like Chex, Old El Paso, Betty Crocker, and Nature Valley. The “homegate” takes place in a kitchen showing General Mills products and recipes. Viewers were able to download recipes and shop for ingredients through grocery store Meijer in both settings. “The intent of the virtual shopping experience was to help transform traditional grocery shopping from transactional to an interactive and inspirational experience,” Stephanie Larson, senior planner of customer marketing at General Mills, said in a statement. “The virtual store allowed us to make shopping for, and preparing, delicious game-day snacks and meals easy, fun and interactive.” To date, the tailgate campaign has earned 13 placements across traditional media and social channels, totaling 596,242 impressions, exceeding General Mills’ projections, according to Larson. The brand was so pleased with the virtual tailgate results that it created a virtual holiday experience that will run through December. The “Holiday Party” features an open floor plan of a kitchen, dining room, and living room decked out for Christmas. It features holiday entertaining tips like how to prepare a tablescape, or how to pair wines, as well as recipes using General Mills products. Since it began on Nov. 28, there have been 3,849 page views and an average duration session of one minute and 41 seconds. The virtual stores can also be a way to connect with customers that speak a different language, or expand into new locations. “These virtual stores can be customized and localized to the individual market giving a new unique experience,” Marc Loeb, head of global sales at ByondXR, a company that builds immersive commerce sites, said via email. “This allows brands to enter and test in markets where they may not have yet penetrated in the physical. We are currently seeing tremendous growth in China and the APAC region of the world.” Lacta, a Brazilian chocolate company owned by Mondelez, is hoping to see similar engagement with its new virtual chocolate shop. The sweets brand worked with ByondXR to set up the virtual store, which will have almost 80 products for sale, from truffles to chocolate bars, and include interactive elements like quizzes to help shoppers find the right gift. “Food and other CPG products are going to transition to more experience-based selling,” Eran Galil, chief technology officer of ByondXR, said via email. “The metaverse is a new whole level by which the food industry can promote itself and stand out against the competition. Better prices are not enough – brands need to sell a better buying experience.” Lacta’s products are usually bought in supermarkets, so its current e-commerce website has low traffic and engagement throughout the year, according to Galil. “With the virtual store, [Lacta] now has a ‘home’ of its own that elevates the brand’s presence to a more prestigious one – like top chocolatier specialty stores,” Galil wrote. He adds that the site is still in early days, but that the conversion rate is tracking higher than Lacta’s traditional e-commerce site. Of course, a virtual store isn’t necessarily the right strategy for every brand. It also doesn’t mean a retailer should abandon their e-commerce sites in favor of virtual experiences, said MediaLink’s Sharp. “Digital experiences like this have to take into account two different customers - one who wants to get to know you, and one who just wants to transact,” she said. “If you buy the same product over and over, an immersive experience might actually be frustrating.” Similar to NFTs or Roblox activations, virtual stores are another channel for brands to connect with younger and digitally-native audiences. For younger generations, virtual stores might become normal, according to Naom Levavi, ByondXR’s CEO. Virtual stores allow for more gamification. “They are more engaging, like finding a hidden perfume bottle for a discount code, or an AI tool that gives you a depe skin analysis, a live stream by an influencer or associate. The list goes on,” he said via email. “They’re a chance to form an emotional connection with audiences like millennials and Gen Z who are more accustomed to virtual technologies, and these days see it as a standard that should be met for every brand.” See Ad Age's 2021 Marketers of the Year here. Behind the rankings: Ad Age World's Largest Advertisers 2021

Why virtual stores are an entry for brands into the metaverse

Featured Stories